CLIs: Pros and Cons

[Journeygod]

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@longtimelurker wrote:

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@Journeygod wrote:

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@Anonymous wrote:

Many people on this board really seem into getting CLIs. I understand the UTL factor but are there any other pros and cons to getting a lot of CLIs?

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Bigger credit lines beget bigger credit lines.

Biggest card: British Airways $33,000

Total credit: $276,400

Util: 4%

(I gotta update my siggy!) -LOL

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Sometimes.   Many of us have had the experience of getting low CL cards after a series of high ones, particularly if the new card is from an issuer you already have.

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I don't go for existing issuers. Every issuer has their own internal limit and once you hit it, that's it.

With that being said, you will eventually run out of new creditors and will experience some overlap, if you're still pursuing more credit.

I personally haven't hit those walls yet.

But. if you're applying for new credit with a specific purpose in mind (like me) then go for it.

If not, pick a limit you're comfortable with and just stop.

No more self-initiated CLI's, No apps, No nothing.

[Anonymous]

Since everything is electronic it would not surprise me how easy it is to create extra data points for every consumer. they can count how many times you login, count how many times you tried for credit increases, how many times have poked around to see what your balance transfer offers are and so on. Just because it's automatic and not called in does not mean it's not documented. Scary campfire story over.

[Anonymous]

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@Anonymous wrote:
Since everything is electronic it would not surprise me how easy it is to create extra data points for every consumer. they can count how many times you login, count how many times you tried for credit increases, how many times have poked around to see what your balance transfer offers are and so on. Just because it's automatic and not called in does not mean it's not documented. Scary campfire story over.

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Ha. There is probably some truth to this.  Gotta watch out for the internet, jk   Hopefully, this thread makes people think before going trigger-happy with CLIs on their 20+ cards!

[Anonymous]

This thread has covered the subject well. Want to add about hitting the wall. In the last two weeks I found the wall and out of the blue, FR from a major bank. For the last four years I had around $40K with them in revolving credit and in my quest to right size my cards eliminated SD'ed cards and requested to reallocate credit lines. Well the bank used a hard inquiry and ran my complete banking and credit with them. In the end they wanted to reduce my credit lines by over $25K. It has been a long two weeks. Save some of it. Somewhere on this forum I read recently stay off the lenders radar. To add insult to injury I closed four bank credit cards worth over $40K and my FICO 8 Score went from 848 to 826 (300 to 850). Took me two years to get to the high score and two days to shoot myself in the head. Did not think it would happen to me as I have a thick credit file. Wrong!

[longtimelurker]

While staying off the radar has always been part of the MS and bonus churning strategy, it makes sense for many people.  As you can tell from all the "XXX closed my cards/CLDs for no reason" type posts, individuals often are not aware of what a bank may consider risky, and every interaction is an additional opportunity for someone at the bank to care.

Also, each interaction with a human (vs automated) has a cost for the bank, so repeated requests (for APR reductions, CLIs etc) could reduce the chances of a positive answer to the question "Is this a profitable customer we wish to keep"

[galahad15]

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@Spider15 wrote:
This thread has covered the subject well. Want to add about hitting the wall. In the last two weeks I found the wall and out of the blue, FR from a major bank. For the last four years I had around $40K with them in revolving credit and in my quest to right size my cards eliminated SD'ed cards and requested to reallocate credit lines. Well the bank used a hard inquiry and ran my complete banking and credit with them. In the end they wanted to reduce my credit lines by over $25K. It has been a long two weeks. Save some of it. Somewhere on this forum I read recently stay off the lenders radar. To add insult to injury I closed four bank credit cards worth over $40K and my FICO 8 Score went from 848 to 826 (300 to 850). Took me two years to get to the high score and two days to shoot myself in the head. Did not think it would happen to me as I have a thick credit file. Wrong!

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Sorry to hear about the AA there Spider 

[Anonymous]

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@Spider15 wrote:
This thread has covered the subject well. Want to add about hitting the wall. In the last two weeks I found the wall and out of the blue, FR from a major bank. For the last four years I had around $40K with them in revolving credit and in my quest to right size my cards eliminated SD'ed cards and requested to reallocate credit lines. Well the bank used a hard inquiry and ran my complete banking and credit with them. In the end they wanted to reduce my credit lines by over $25K. It has been a long two weeks. Save some of it. Somewhere on this forum I read recently stay off the lenders radar. To add insult to injury I closed four bank credit cards worth over $40K and my FICO 8 Score went from 848 to 826 (300 to 850). Took me two years to get to the high score and two days to shoot myself in the head. Did not think it would happen to me as I have a thick credit file. Wrong!

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That's quite unfortunate and sorry to hear about that. Thank you for sharing your cautionary tale with us.

[RonM21]

I think there are many pros when you aren't someone who has hit many internal limits of your lenders. I think once you get to that point, then things change a bit, as already mentioned.

[longtimelurker]

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@RM21 wrote:
I think there are many pros when you aren't someone who has hit many internal limits of your lenders. I think once you get to that point, then things change a bit, as already mentioned.

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I am still unconvinced!, except in the very early stages of credit.   Let's say you go from $100K in total CL to $250K, without adding new cards (since we are talking about CLIs)   What are the many pros?   Yes, utilization can be reduced, but, if you can PIF anyway, you can push utilization (almost) as low as like anyway, any anyway most people don't need to maximize their score all the time.

And even if you subscribe to the "high limits cause other issuers to give high limits" meme, that would be a circular reason (I only need high limits if high limits are a good thing)

Now going from pretty unusable limits ($100 etc CLs) to better ones does make sense, as in the early stages of credit or rebuilding.   But at other points...

[kdm31091]

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@longtimelurker wrote:

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@RM21 wrote:
I think there are many pros when you aren't someone who has hit many internal limits of your lenders. I think once you get to that point, then things change a bit, as already mentioned.

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I am still unconvinced!, except in the very early stages of credit.   Let's say you go from $100K in total CL to $250K, without adding new cards (since we are talking about CLIs)   What are the many pros?   Yes, utilization can be reduced, but, if you can PIF anyway, you can push utilization (almost) as low as like anyway, any anyway most people don't need to maximize their score all the time.

And even if you subscribe to the "high limits cause other issuers to give high limits" meme, that would be a circular reason (I only need high limits if high limits are a good thing)

Now going from pretty unusable limits ($100 etc CLs) to better ones does make sense, as in the early stages of credit or rebuilding.   But at other points...

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I agree here. High limits are nice and all, but realistically, how much of them are you using at any given point? Certainly most people who have 150k in limits aren't using anywhere close to that. A cushion for utilization makes sense to some degree and we all want limits we can use for everyday spending, and maybe the occasional emergency, but other than that I don't see the big need/benefit for tons of huge limits.

It is a circular argument. Higher limits may beget higher limits if you subscribe to that, but then, if you have "good enough" limits, does it matter?